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Donald Trump is rising because the middle class is crashing
There’s no secret behind America’s groundswell of support for Donald Trump, the political outsider whose bid for the Republican presidential nomination threatens rip the party of Lincoln asunder. Trump supporters—who pushed him to victory in key Republican nominating contests in Mississippi and Michigan on Tuesday—are disproportionately older whites without college diplomas.
Today, these folks are usually referred to as “working-class.” But at the heart of Trump’s appeal is the uncomfortable fact that they used to be something else. These people used to be America’s middle class.
Last year, the Federal Reserve Bank of St. Louis published an interesting bit of research. The paper showed that “middle class” living standards have declined much more drastically than other metrics—such as median household income—would suggest.
Analysts at the bank took survey data and sorted respondents by demographic criteria such as race, age, and education level, rather than income. They defined “middle class” families as those families “headed by someone at least 40 years old who is white or Asian with exactly a high school diploma, or black or Hispanic with a two- or four-year college degree.” These were the demographic profiles typical of people at the center of the US income distribution—the middle class—back when the same survey was first taken in the late 1980s.
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As the chart above shows, it wasn’t to last. Income inequality began to grow again in the early 1980s, and has since returned to the relatively high levels seen in the years before the Great Depression.
Why? Well, for many reasons. But the key is wages.
Incomes at the upper echelons of the American earnings distribution have surged in recent years, while incomes for the vast majority have stagnated. Data from US economist Robert Gordon’s recent book The Rise and Fall of American Growth actually show that real incomes have slightly decreased between 1972 and 2013 for the bottom 90% of US workers.
Today, these folks are usually referred to as “working-class.” But at the heart of Trump’s appeal is the uncomfortable fact that they used to be something else. These people used to be America’s middle class.
Last year, the Federal Reserve Bank of St. Louis published an interesting bit of research. The paper showed that “middle class” living standards have declined much more drastically than other metrics—such as median household income—would suggest.
Analysts at the bank took survey data and sorted respondents by demographic criteria such as race, age, and education level, rather than income. They defined “middle class” families as those families “headed by someone at least 40 years old who is white or Asian with exactly a high school diploma, or black or Hispanic with a two- or four-year college degree.” These were the demographic profiles typical of people at the center of the US income distribution—the middle class—back when the same survey was first taken in the late 1980s.
---
?w=640
As the chart above shows, it wasn’t to last. Income inequality began to grow again in the early 1980s, and has since returned to the relatively high levels seen in the years before the Great Depression.
Why? Well, for many reasons. But the key is wages.
Incomes at the upper echelons of the American earnings distribution have surged in recent years, while incomes for the vast majority have stagnated. Data from US economist Robert Gordon’s recent book The Rise and Fall of American Growth actually show that real incomes have slightly decreased between 1972 and 2013 for the bottom 90% of US workers.
http://qz.com/634340/donald-trump-is-what-you-get-when-you-spend-three-decades-destroying-the-us-middle-class/
So it really shouldnt be surprise that some of the middle class whites are being drawn towards Trump. He's spewing populism and nationalism which become stronger magnets during times of uncertainty and fear. His anti-trade, anti-immigration, and anti-establishment views is going to resonate with those who feel the middle class is going to collapse.
And this is important because Hillary is vulnerable on these issues. Bernie is tapping into some of this anger that is also starting to brew on the left concerning income inequality. The upset she had in Michigan should be a wake-up call. The same kind of problem could happen to Hillary in the general election if Trump is able to convince union workers in the Rust Belt states that Hillary supports shipping out American jobs, supports free trade deals, and expanding programs like H1B visas that take jobs away from Americans. Trump could pick off votes just by claiming he will play hardball with China and Mexico and kick out immigrants.
The key factor here is that America's political stability is dependent on middle class stability. If American middle class was stable and wages were steadily increasing, Trump would have never made it this far. If the middle class crashes and we have another Great Depression, god only knows what strange and radical political ideas will flood into the mainstream. This is a worry that will go on well beyond this election, regardless of the results.
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